1 00:00:10,800 --> 00:00:14,080 Speaker 1: Hello, and welcome to another episode of the All Thoughts Podcast. 2 00:00:14,160 --> 00:00:18,840 Speaker 1: I'm Tracy Alloway and I'm Joe. Wasn't Joe. It feels 3 00:00:18,880 --> 00:00:22,520 Speaker 1: like there's a lot of terrible things happening in the 4 00:00:22,560 --> 00:00:26,560 Speaker 1: world at the moment. Yeah, it does. The news has 5 00:00:26,600 --> 00:00:33,120 Speaker 1: been pretty grim, between the virus, Afghanistan, natural disasters. I 6 00:00:33,159 --> 00:00:36,320 Speaker 1: would I would, I would agree with your assessment. Yeah, 7 00:00:36,400 --> 00:00:39,760 Speaker 1: And I think the sort of pace of the bad 8 00:00:39,840 --> 00:00:42,080 Speaker 1: news means that a lot of stuff is kind of 9 00:00:42,120 --> 00:00:45,519 Speaker 1: getting buried in the news cycle very quickly after it happens. 10 00:00:45,560 --> 00:00:51,080 Speaker 1: So we're recording this on auguste UM. Just a few 11 00:00:51,200 --> 00:00:55,880 Speaker 1: days ago, there was a massive earthquake in Haiti. I 12 00:00:55,920 --> 00:00:58,880 Speaker 1: think more than a thousand people are believed to be dead. 13 00:00:59,000 --> 00:01:01,440 Speaker 1: But that death hole is probably going to go up 14 00:01:01,480 --> 00:01:05,720 Speaker 1: some more um. But that event has already sort of 15 00:01:05,720 --> 00:01:09,959 Speaker 1: been superseded by events in Afghanistan, and people have just 16 00:01:10,000 --> 00:01:14,280 Speaker 1: sort of moved on to the next big global drama. 17 00:01:14,480 --> 00:01:19,280 Speaker 1: But I wanted to dedicate this episode to Haiti because 18 00:01:19,840 --> 00:01:22,760 Speaker 1: if you think about what the country has recently experienced, 19 00:01:22,800 --> 00:01:26,440 Speaker 1: you know, the earthquake that I just mentioned came off 20 00:01:26,480 --> 00:01:30,880 Speaker 1: the back of its president getting assassinated just last month, 21 00:01:30,920 --> 00:01:33,280 Speaker 1: and then of course before that, Haiti has had a 22 00:01:33,319 --> 00:01:39,280 Speaker 1: long history of natural disasters, Hurricane matthew in, a really 23 00:01:39,280 --> 00:01:44,320 Speaker 1: really catastrophic earthquake back in and the country itself is 24 00:01:44,360 --> 00:01:47,240 Speaker 1: one of the poorest in the world, so it in 25 00:01:47,360 --> 00:01:50,280 Speaker 1: many ways it just feels like Haiti can't take a 26 00:01:50,320 --> 00:01:54,080 Speaker 1: break or catch a break, right, I would say, pretty 27 00:01:54,160 --> 00:01:58,040 Speaker 1: much all of my life, I think Haiti has been 28 00:01:58,440 --> 00:02:05,360 Speaker 1: been known for violence, extreme poverty, international attempts at reviving 29 00:02:05,800 --> 00:02:09,120 Speaker 1: the economy or domestic institutions that seem largely to have failed, 30 00:02:09,560 --> 00:02:13,960 Speaker 1: and then of course they sort of unforeseen disasters. But 31 00:02:14,000 --> 00:02:18,040 Speaker 1: I think you know, within particularly the Western hemisphere, Haiti 32 00:02:18,320 --> 00:02:24,320 Speaker 1: is known to have had an extraordinary, extraordinary, extraordinarily bad fortune. Yeah, 33 00:02:24,520 --> 00:02:28,480 Speaker 1: I'm glad you mentioned international efforts to revive the economy, 34 00:02:28,520 --> 00:02:31,919 Speaker 1: because today we are going to be talking about one 35 00:02:32,400 --> 00:02:37,880 Speaker 1: possible effort, and possibly the most obscure of those efforts, 36 00:02:38,240 --> 00:02:43,440 Speaker 1: which involves bonds UM that were issued more than let's see, 37 00:02:43,840 --> 00:02:48,240 Speaker 1: almost two hundred years ago UM as part of Haiti's 38 00:02:48,280 --> 00:02:51,959 Speaker 1: independence movement, and there is a discussion now about whether 39 00:02:52,120 --> 00:02:56,239 Speaker 1: or not you could possibly UM sort of unwind that 40 00:02:56,360 --> 00:03:01,440 Speaker 1: debt in order to pay reparations to So it's sort 41 00:03:01,440 --> 00:03:05,560 Speaker 1: of um an obscure thing, but it fits right into 42 00:03:05,600 --> 00:03:09,040 Speaker 1: add lots and uh, you know our obsession with old debts, 43 00:03:09,160 --> 00:03:12,320 Speaker 1: So we're going to get into it. I'm looking forward 44 00:03:12,320 --> 00:03:15,560 Speaker 1: to this. This is odious debt one of the one 45 00:03:15,639 --> 00:03:17,560 Speaker 1: of the topics that I think you've really done a 46 00:03:17,639 --> 00:03:20,240 Speaker 1: great job sort of bringing to the forefront of media 47 00:03:20,280 --> 00:03:22,560 Speaker 1: and odd lots and looking forward to this and talking 48 00:03:22,560 --> 00:03:25,800 Speaker 1: about this in the Haiti context. No, thank you. Um well, 49 00:03:25,919 --> 00:03:29,000 Speaker 1: I have to credit one of our guests, Mit to Glate. 50 00:03:29,240 --> 00:03:32,200 Speaker 1: He's a professor at the University of Virginia. He's the 51 00:03:32,200 --> 00:03:35,520 Speaker 1: one that introduced me to this concept. And we also 52 00:03:35,600 --> 00:03:39,960 Speaker 1: have his fellow researcher, Ugo Panizza, a professor at the 53 00:03:40,080 --> 00:03:45,360 Speaker 1: Graduate Institute of Geneva. So welcome Mitt and Uko, thank you. 54 00:03:46,000 --> 00:03:50,160 Speaker 1: Shall we start with the very basics for people who 55 00:03:50,320 --> 00:03:55,320 Speaker 1: haven't heard the concept of odious debt before, what exactly 56 00:03:55,360 --> 00:03:59,360 Speaker 1: do we mean when we say odious debt? So they're 57 00:03:59,360 --> 00:04:06,720 Speaker 1: theretly two meanings of odious debt as its discussed both 58 00:04:06,800 --> 00:04:12,160 Speaker 1: in the popular press and in the academic slash legal literature. 59 00:04:13,280 --> 00:04:15,920 Speaker 1: One meaning is just you know, any debt that you 60 00:04:15,960 --> 00:04:19,919 Speaker 1: don't like it's just has a bad odor and you 61 00:04:19,960 --> 00:04:24,400 Speaker 1: don't want to pay it back. The more technical legal 62 00:04:24,480 --> 00:04:30,479 Speaker 1: meaning of odious debt is that it is debt incurred 63 00:04:30,520 --> 00:04:37,680 Speaker 1: by a despotic leader without the approval of the population 64 00:04:38,520 --> 00:04:44,039 Speaker 1: and the knowledge of the creditors, that these debts are 65 00:04:44,160 --> 00:04:50,080 Speaker 1: being used for purposes that are contrary to any benefit 66 00:04:50,279 --> 00:04:55,159 Speaker 1: that would result for the populace. So the classic example, 67 00:04:56,520 --> 00:05:00,960 Speaker 1: and you know during the Bush administration, odious debtspeak very popular. 68 00:05:01,240 --> 00:05:07,919 Speaker 1: When the US went into Iraq. The example was Saddam 69 00:05:08,000 --> 00:05:13,480 Speaker 1: Hussein borrowing hundreds of billions of dollars to buy arms, 70 00:05:13,560 --> 00:05:18,240 Speaker 1: and those arms were then used to oppress the Iraqi people. 71 00:05:18,800 --> 00:05:24,560 Speaker 1: So that that that is the popularized version of this 72 00:05:24,640 --> 00:05:29,919 Speaker 1: odious debt concept you mentioned. Okay, so we can understand 73 00:05:30,000 --> 00:05:34,919 Speaker 1: easily enough this idea that if a despotic leader borrows money, 74 00:05:35,240 --> 00:05:37,840 Speaker 1: prep doesn't use the money in service of the public, 75 00:05:37,920 --> 00:05:41,440 Speaker 1: and then after they go it uh see, it's odious 76 00:05:41,520 --> 00:05:43,799 Speaker 1: the idea that the public would then have to bear 77 00:05:43,839 --> 00:05:47,040 Speaker 1: the cost of that debt. How much is in the 78 00:05:47,080 --> 00:05:50,680 Speaker 1: determination or the thinking of when debt is odious? How 79 00:05:50,760 --> 00:05:53,840 Speaker 1: much or how difficult is it or how important is 80 00:05:53,880 --> 00:05:57,440 Speaker 1: it to establish that the lender understood this that when 81 00:05:57,440 --> 00:06:00,560 Speaker 1: they were lending that when someone bought the foreign debt 82 00:06:00,720 --> 00:06:04,279 Speaker 1: of a given country, that they were buying into debt 83 00:06:04,480 --> 00:06:07,760 Speaker 1: that really was not going to help the public in 84 00:06:07,760 --> 00:06:15,279 Speaker 1: any way. So usually the lender is not really analyzed 85 00:06:15,360 --> 00:06:21,719 Speaker 1: in these discussions of odious debts. Almost every discussion of 86 00:06:21,760 --> 00:06:27,480 Speaker 1: odious debts. For example, take the Saddam Huseyne case, which 87 00:06:27,600 --> 00:06:30,120 Speaker 1: is you know, the most recent a lot of the 88 00:06:30,160 --> 00:06:34,880 Speaker 1: debts there were literally arms dealers selling arms to Saddam, 89 00:06:35,600 --> 00:06:40,400 Speaker 1: but the primary focus was on the despotism of the 90 00:06:40,520 --> 00:06:43,680 Speaker 1: leader of Saddam. It's really only in a case like 91 00:06:43,920 --> 00:06:48,880 Speaker 1: Haiti and sort of more broadly colonial or imperial debts 92 00:06:49,920 --> 00:06:54,360 Speaker 1: that you begin to think about the lender. And that's 93 00:06:54,440 --> 00:06:59,160 Speaker 1: not something that we have traditionally done. So I want 94 00:06:59,160 --> 00:07:04,000 Speaker 1: to get into the exact situation with Haiti and the 95 00:07:04,080 --> 00:07:07,400 Speaker 1: money involved, but before we do, you know, we're talking 96 00:07:07,440 --> 00:07:12,760 Speaker 1: about a broad definition of odious debt that really focuses 97 00:07:13,080 --> 00:07:16,760 Speaker 1: on the borrower. And as you mentioned, the classical example 98 00:07:16,960 --> 00:07:20,200 Speaker 1: is a despot who borrows lots of money that doesn't 99 00:07:20,240 --> 00:07:27,400 Speaker 1: necessarily benefit their country's population. How did that particular interpretation 100 00:07:27,600 --> 00:07:31,960 Speaker 1: of odious debt come into being because in some ways, 101 00:07:32,040 --> 00:07:37,840 Speaker 1: like it seems very very um defined and specific. So 102 00:07:38,120 --> 00:07:40,800 Speaker 1: this is an interesting question that you ask, And you know, 103 00:07:40,840 --> 00:07:43,920 Speaker 1: I've been working on this, and Ugo probably has a 104 00:07:43,960 --> 00:07:46,680 Speaker 1: different perspective, but he's also been working on this for 105 00:07:46,720 --> 00:07:50,800 Speaker 1: a long time. We worked together on a debts incurred 106 00:07:50,800 --> 00:07:56,080 Speaker 1: by Nicolas Maduro in Venezuela, and sort of I always 107 00:07:56,120 --> 00:07:58,000 Speaker 1: took it for granted that, you know, if you have 108 00:07:58,000 --> 00:08:02,880 Speaker 1: a despotic leader borrowing the future governments, especially if they're 109 00:08:03,320 --> 00:08:07,000 Speaker 1: you know, democratic governments, they shouldn't be burdened by this debt, 110 00:08:07,120 --> 00:08:12,080 Speaker 1: and it sort of seemed natural and logical and sensible, 111 00:08:12,480 --> 00:08:16,040 Speaker 1: and I didn't think about it. It seemed right until 112 00:08:17,160 --> 00:08:21,360 Speaker 1: I started working with Hugo and or other two co 113 00:08:21,480 --> 00:08:27,160 Speaker 1: authors about the Haitian debt, And in that context, one 114 00:08:27,200 --> 00:08:31,160 Speaker 1: of our other co authors, Mark Widermer, started asking the 115 00:08:31,280 --> 00:08:35,920 Speaker 1: question of you know, why have we framed this doctrine 116 00:08:36,040 --> 00:08:41,840 Speaker 1: in this particular fashion. And my best guests from the 117 00:08:42,000 --> 00:08:47,080 Speaker 1: literature and talking to anthropos social anthropologists who studied this 118 00:08:47,600 --> 00:08:53,160 Speaker 1: in more detail, is that it's a product of the 119 00:08:53,320 --> 00:08:57,760 Speaker 1: interests who created this doctrine. Now, this is a doctrine 120 00:08:57,800 --> 00:09:01,880 Speaker 1: that was created by the U. S State Department in 121 00:09:02,280 --> 00:09:06,760 Speaker 1: the late eighteen hundreds after the Spanish American War. They 122 00:09:06,760 --> 00:09:10,840 Speaker 1: didn't want to pay the debts that had been incurred 123 00:09:11,679 --> 00:09:15,400 Speaker 1: by Spain using Cuba as collateral, and so they said, 124 00:09:15,440 --> 00:09:19,000 Speaker 1: you know, you were despotic leader leaders putting down an 125 00:09:19,040 --> 00:09:23,800 Speaker 1: independence movement. And then the US again in UM two 126 00:09:23,800 --> 00:09:28,240 Speaker 1: thousand three two four, does not want to pay Saddam 127 00:09:28,360 --> 00:09:34,040 Speaker 1: Hussein's debts. So the rejuvenation of the odious debt doctrine 128 00:09:34,080 --> 00:09:38,320 Speaker 1: again is in the context of a despotic leader, but 129 00:09:39,480 --> 00:09:43,040 Speaker 1: it never really touches colonial debts, where the leaders are 130 00:09:43,080 --> 00:09:46,440 Speaker 1: not quite as despotic and much more complicated, in part 131 00:09:46,559 --> 00:09:50,960 Speaker 1: because the countries and the scholars who pushed this doctrine, 132 00:09:51,000 --> 00:09:54,600 Speaker 1: we're pushing it in a particular context. I don't know, Hugo, 133 00:09:54,679 --> 00:09:57,920 Speaker 1: if you you have a different view, I mean I am. 134 00:09:57,960 --> 00:10:00,800 Speaker 1: I am a former colonial s object then grew up 135 00:10:00,800 --> 00:10:04,480 Speaker 1: in the Caribbean, so I have a particularly jaundiced view 136 00:10:04,520 --> 00:10:08,200 Speaker 1: of all of this. I mean, there is also another aspect. 137 00:10:08,240 --> 00:10:11,680 Speaker 1: So there is the aspect from let's say the Angio movements, 138 00:10:12,240 --> 00:10:14,800 Speaker 1: you know, kill the debt and all this sort of stuff, 139 00:10:14,840 --> 00:10:19,120 Speaker 1: and these people would like to cancel all sorts of death. 140 00:10:19,720 --> 00:10:22,600 Speaker 1: So there is a more I don't know, leftist if 141 00:10:22,600 --> 00:10:26,079 Speaker 1: you want to call it this way perspective, right, and 142 00:10:26,120 --> 00:10:29,679 Speaker 1: there there is a debate asked me to say it. 143 00:10:30,000 --> 00:10:33,959 Speaker 1: It seems reasonable that when somebody borrows to oppress its 144 00:10:34,000 --> 00:10:37,560 Speaker 1: own people this that should not be enforceable. But then 145 00:10:37,600 --> 00:10:40,120 Speaker 1: if you talk with market people, they tell you where 146 00:10:40,200 --> 00:10:43,959 Speaker 1: you draw the line, right, It's like where where does 147 00:10:44,000 --> 00:10:46,840 Speaker 1: the guy become a deskpot? And some people say, if 148 00:10:46,840 --> 00:10:50,000 Speaker 1: you start going there, then nobody will ever learn to 149 00:10:50,080 --> 00:10:54,000 Speaker 1: any country because you know, no countries a perfect democracy. 150 00:10:54,040 --> 00:10:56,520 Speaker 1: So these other there is this other dimension. So some 151 00:10:56,559 --> 00:10:59,839 Speaker 1: people said that maybe you should have an expanted that 152 00:11:00,160 --> 00:11:03,480 Speaker 1: rational of obviousness. Right. So there is a famous paper 153 00:11:03,559 --> 00:11:08,600 Speaker 1: by malcol Michael Kramer and C. Chandra which says, you know, 154 00:11:09,280 --> 00:11:12,680 Speaker 1: at some point the official sector, my or the UN 155 00:11:12,800 --> 00:11:16,080 Speaker 1: or whatever might declare this country's audious and from this 156 00:11:16,120 --> 00:11:19,920 Speaker 1: moment on that contracted by this person by this country 157 00:11:19,960 --> 00:11:22,240 Speaker 1: will not be enforceable. So there is a big also 158 00:11:22,320 --> 00:11:26,880 Speaker 1: discussion on this exanta versus expost, which is different from 159 00:11:26,960 --> 00:11:30,280 Speaker 1: the high heat case that we're talking about here. What 160 00:11:30,360 --> 00:11:35,800 Speaker 1: do you walking through the basic contours of the Haiti situation, 161 00:11:36,160 --> 00:11:38,800 Speaker 1: the numbers, the claims, just sort of like give us 162 00:11:38,880 --> 00:11:43,440 Speaker 1: the sort of like basic summary of the colonial debt 163 00:11:43,480 --> 00:11:46,080 Speaker 1: that was incurred, why the debt was incurred, how much 164 00:11:46,120 --> 00:11:49,280 Speaker 1: it was and so forth. Okay, so I'll begin with 165 00:11:49,400 --> 00:11:53,959 Speaker 1: the easy part the story, which is wonderful, and then 166 00:11:54,000 --> 00:11:58,160 Speaker 1: I'll give google the boring part about the numbers that 167 00:11:58,400 --> 00:12:02,280 Speaker 1: in the end are much more important. So I think 168 00:12:02,360 --> 00:12:06,240 Speaker 1: it's a bit embarrassing. Ugo and I both consider ourselves 169 00:12:06,280 --> 00:12:10,200 Speaker 1: scholars of international debt and have been doing this for 170 00:12:10,520 --> 00:12:15,040 Speaker 1: at least two decades, and neither of us had really 171 00:12:15,080 --> 00:12:22,400 Speaker 1: paid any attention to the Haitian independence debt of eighteen five. 172 00:12:22,920 --> 00:12:25,480 Speaker 1: We it just seemed like this old, obscure thing we 173 00:12:25,520 --> 00:12:29,920 Speaker 1: hadn't really heard of. It didn't seem relevant to most 174 00:12:29,920 --> 00:12:36,160 Speaker 1: of what we did until this last semester last year. Really, 175 00:12:37,160 --> 00:12:42,800 Speaker 1: when COVID hits and we decide in our classes, you know, 176 00:12:42,920 --> 00:12:45,840 Speaker 1: maybe this is time to focus on some of the 177 00:12:45,920 --> 00:12:48,599 Speaker 1: poorer regions around the world and see what's going to 178 00:12:48,760 --> 00:12:54,079 Speaker 1: happen if they're really hit bad by COVID and they 179 00:12:54,160 --> 00:12:59,079 Speaker 1: need to think about what kind of financial recoveries can 180 00:12:59,160 --> 00:13:02,320 Speaker 1: we get. Some of my students in my Sovereign Debt 181 00:13:02,320 --> 00:13:06,440 Speaker 1: class find this Haitian independence dead of eighteen twenty five, 182 00:13:06,880 --> 00:13:08,880 Speaker 1: and I want to dismiss it because it is not 183 00:13:09,000 --> 00:13:11,880 Speaker 1: what I had planned that we would work on in 184 00:13:11,920 --> 00:13:15,920 Speaker 1: the class. And then I started looking at it and 185 00:13:16,040 --> 00:13:19,199 Speaker 1: started talking to Ugo and our other co authors about it, 186 00:13:19,880 --> 00:13:26,040 Speaker 1: and it's astounded. So in eighteen twenty five, Haiti has 187 00:13:26,080 --> 00:13:30,600 Speaker 1: a debt imposed on it by France. France sends a 188 00:13:30,640 --> 00:13:34,200 Speaker 1: bunch of gun boats. I think there were fourteen gun 189 00:13:34,240 --> 00:13:39,720 Speaker 1: boats with five hundred guns pointed at the Haitian capital, 190 00:13:40,559 --> 00:13:45,360 Speaker 1: and France says to the Haitian people, look, we are 191 00:13:45,400 --> 00:13:50,960 Speaker 1: willing to recognize you as independent. Haiti had fought a 192 00:13:51,040 --> 00:13:55,600 Speaker 1: bloody revolution against France and one its independence in eighteen 193 00:13:55,640 --> 00:14:00,000 Speaker 1: o four. So two decades prior, the French under Napole 194 00:14:00,000 --> 00:14:03,080 Speaker 1: Lion had tried to take back Hadi. They had failed. 195 00:14:04,200 --> 00:14:07,320 Speaker 1: And then finally in eight and this is after the 196 00:14:07,360 --> 00:14:11,119 Speaker 1: Louisiana purchase, France sort of decides, you know, no more colonies, 197 00:14:11,800 --> 00:14:13,600 Speaker 1: at least in that part of the world. It's just 198 00:14:13,640 --> 00:14:18,080 Speaker 1: too expensive when you keep losing, and so they try 199 00:14:18,120 --> 00:14:22,840 Speaker 1: to negotiate with Haiti. We will give you your independence, 200 00:14:22,880 --> 00:14:26,480 Speaker 1: We will recognize you as independent if you pay us 201 00:14:26,920 --> 00:14:30,320 Speaker 1: a hundred and fifty million francs. Now, to get some 202 00:14:31,040 --> 00:14:34,840 Speaker 1: sense of how much this is, and we go will 203 00:14:34,880 --> 00:14:39,040 Speaker 1: hopefully talk about what fraction of hades revenues it was 204 00:14:39,120 --> 00:14:42,760 Speaker 1: at that time. But the Louisiana purchase was about fifteen 205 00:14:42,800 --> 00:14:46,120 Speaker 1: million francs. This is a hundred and fifty million francs 206 00:14:46,320 --> 00:14:50,520 Speaker 1: they impose on Haiti with the gunboats pointed at them, 207 00:14:50,640 --> 00:14:55,120 Speaker 1: and the calculation of this amount the historical record is 208 00:14:55,160 --> 00:15:01,080 Speaker 1: not completely clear, but basically, the French King Charles needed 209 00:15:01,120 --> 00:15:07,240 Speaker 1: this money to pacify the former plantation owners and their 210 00:15:07,520 --> 00:15:12,840 Speaker 1: estates in France, and calculations were made based on the 211 00:15:12,920 --> 00:15:17,600 Speaker 1: amount of loss that they suffered, specifically in terms of 212 00:15:17,920 --> 00:15:21,200 Speaker 1: the number of slaves who went free as a result 213 00:15:21,920 --> 00:15:26,760 Speaker 1: of the revolution. So that's the basic that's that's the 214 00:15:26,840 --> 00:15:29,760 Speaker 1: debt that was imposed on Haiti. Haiti doesn't pay it 215 00:15:29,800 --> 00:15:33,640 Speaker 1: back for almost a century, actually more than a century, 216 00:15:33,960 --> 00:15:37,600 Speaker 1: and much of Haitian borrowing in the next century is 217 00:15:37,800 --> 00:15:41,720 Speaker 1: just to pay back this extremely large debt that they 218 00:15:41,760 --> 00:15:45,640 Speaker 1: owe to friends. Now in terms of specific numbers, um 219 00:15:45,640 --> 00:15:49,840 Speaker 1: I leave that to UGO, so maybe they we don't 220 00:15:49,880 --> 00:15:56,320 Speaker 1: have good estimates for GDP at that period and or revenues, 221 00:15:56,720 --> 00:16:00,840 Speaker 1: but whatever estimates we have suggested this amount about ten 222 00:16:00,960 --> 00:16:04,520 Speaker 1: years worth of revenue, so it's a very large number 223 00:16:05,400 --> 00:16:11,720 Speaker 1: and or about three times situs GDP based on on 224 00:16:11,880 --> 00:16:15,880 Speaker 1: the on the numbers that that we have now. So 225 00:16:15,920 --> 00:16:18,840 Speaker 1: they were very very large numbers. And and that's me 226 00:16:18,920 --> 00:16:38,680 Speaker 1: to say it's more more than the Louisiana purchase. So 227 00:16:38,920 --> 00:16:42,280 Speaker 1: can we maybe talk a little bit more about why 228 00:16:42,480 --> 00:16:47,040 Speaker 1: Haiti agreed to pay the indemnity? So, you know, you 229 00:16:47,120 --> 00:16:51,040 Speaker 1: mentioned there were gunboats um pointed at porter of Prince, 230 00:16:51,200 --> 00:16:55,360 Speaker 1: which seems quite threatening. But on the other hand, Hadi 231 00:16:55,600 --> 00:16:58,880 Speaker 1: did get something out of it. And I'm sort of 232 00:16:58,960 --> 00:17:03,680 Speaker 1: playing devil's advocate here, but they did get their independence 233 00:17:03,880 --> 00:17:07,560 Speaker 1: recognized by France, even though they were essentially, you know, 234 00:17:08,240 --> 00:17:12,280 Speaker 1: buying their freedom from slavery, which is terrible, but they 235 00:17:12,320 --> 00:17:16,240 Speaker 1: got the recognition from France. That led to further recognition 236 00:17:16,359 --> 00:17:20,600 Speaker 1: from places like Britain, um that opened up trade relationships 237 00:17:20,680 --> 00:17:23,479 Speaker 1: and things like that. Is there an argument to be 238 00:17:23,560 --> 00:17:29,160 Speaker 1: made that this can't be considered odious because the population, 239 00:17:29,440 --> 00:17:33,800 Speaker 1: you know, got something out of the agreement. So you're 240 00:17:33,920 --> 00:17:41,919 Speaker 1: asking the really tough question. Haiti arguably itself proposed that 241 00:17:42,000 --> 00:17:45,320 Speaker 1: it would pay something to France. Now they didn't propose 242 00:17:45,400 --> 00:17:48,919 Speaker 1: this incredibly large amount. They were thinking more along the 243 00:17:48,960 --> 00:17:51,960 Speaker 1: lines of the Louisiana purchase, and that would have still 244 00:17:52,000 --> 00:17:54,800 Speaker 1: been at least half their GDP for the year, but 245 00:17:55,760 --> 00:17:59,440 Speaker 1: perhaps manageable. Haiti at that point in time was one 246 00:17:59,440 --> 00:18:01,439 Speaker 1: of the rich as parts of the world, which is 247 00:18:01,560 --> 00:18:05,000 Speaker 1: why France was so desperate to hold onto it. They 248 00:18:05,040 --> 00:18:09,119 Speaker 1: they were a huge source of French revenues at the 249 00:18:09,320 --> 00:18:14,760 Speaker 1: at that point in time. But the legal question of 250 00:18:14,960 --> 00:18:20,879 Speaker 1: whether or not Haiti could be charged by France for 251 00:18:20,960 --> 00:18:28,680 Speaker 1: a recognition or be independence or see for the slaves 252 00:18:28,920 --> 00:18:33,879 Speaker 1: fighting a revolution and becoming independent um is quite complicated. 253 00:18:34,800 --> 00:18:38,960 Speaker 1: It's not at all clear, at least in our research, 254 00:18:39,640 --> 00:18:43,040 Speaker 1: whether or not at that point in time it was 255 00:18:43,119 --> 00:18:49,919 Speaker 1: acceptable under international law for countries new countries to be 256 00:18:50,080 --> 00:18:55,000 Speaker 1: charged for somebody else recognizing them. The law is quite murky. 257 00:18:55,119 --> 00:18:57,920 Speaker 1: Now we know it happened, but whether it was legally 258 00:18:58,119 --> 00:19:03,480 Speaker 1: kosher is not year. Can you charge a new country 259 00:19:03,600 --> 00:19:09,359 Speaker 1: for it becoming free and fighting a revolution? Again, not 260 00:19:09,560 --> 00:19:14,240 Speaker 1: at all clear, and then it's not clear either that 261 00:19:14,320 --> 00:19:18,080 Speaker 1: we would apply the laws and norms of that time 262 00:19:18,760 --> 00:19:24,119 Speaker 1: or whether we would apply modern conceptions of human rights, 263 00:19:24,200 --> 00:19:27,560 Speaker 1: where you know, making a d pay for the freedom 264 00:19:27,600 --> 00:19:31,400 Speaker 1: of the slaves clearly wouldn't be acceptable. Yeah, maybe just 265 00:19:31,440 --> 00:19:35,919 Speaker 1: a mol anecdote that for the first fifteen years after independence, 266 00:19:36,560 --> 00:19:39,520 Speaker 1: Haiti was actually split in two countries, with the with 267 00:19:39,640 --> 00:19:43,840 Speaker 1: the president in the south and the king in the north. 268 00:19:44,400 --> 00:19:48,040 Speaker 1: So the president was which was called the Pekion, was 269 00:19:48,080 --> 00:19:51,600 Speaker 1: the first one to sort of propose paying some inmdernity, 270 00:19:51,680 --> 00:19:53,800 Speaker 1: but again, as me too said, he had in mind 271 00:19:55,080 --> 00:19:58,160 Speaker 1: a much smaller amount, while the king in the north 272 00:19:58,320 --> 00:20:04,399 Speaker 1: was always opposed to it. So the idea that a 273 00:20:04,480 --> 00:20:09,040 Speaker 1: country would have to pay uh It's former colonial master 274 00:20:09,280 --> 00:20:14,320 Speaker 1: for recognition, to pay this extraordinary sum to essentially escape, 275 00:20:14,760 --> 00:20:19,720 Speaker 1: you know, depart from slavery. Obviously, it's you know, it's grotesque, 276 00:20:20,080 --> 00:20:23,280 Speaker 1: it's awful. Why is it important, or you know, at 277 00:20:23,359 --> 00:20:27,240 Speaker 1: least intuitively it is. Why is it important to fold 278 00:20:27,320 --> 00:20:30,879 Speaker 1: it into the odious debt literature because obviously the contours 279 00:20:30,920 --> 00:20:35,480 Speaker 1: of it, well being I guess objectively and were morally odious, 280 00:20:35,520 --> 00:20:39,080 Speaker 1: are different than the sort of conception of the conception 281 00:20:39,080 --> 00:20:41,040 Speaker 1: that we talked about in the beginning of a Despot. 282 00:20:41,520 --> 00:20:45,240 Speaker 1: Why is it important today in sort of the establishment 283 00:20:45,440 --> 00:20:48,720 Speaker 1: of the study of odious debt to weave that in 284 00:20:48,880 --> 00:20:53,720 Speaker 1: as opposed to thinking of it as its own distinct concept. 285 00:20:53,800 --> 00:20:57,399 Speaker 1: What does that get? What does that accomplish? So again 286 00:20:57,880 --> 00:21:03,600 Speaker 1: you're asking an extreme, the good question and a tough one. 287 00:21:04,600 --> 00:21:09,600 Speaker 1: Here's my take on this. The the odious debt movement 288 00:21:12,080 --> 00:21:16,560 Speaker 1: is a powerful one. Just the rhetoric of that movement 289 00:21:17,280 --> 00:21:22,000 Speaker 1: has a has had a lot of sway with NGOs, 290 00:21:22,280 --> 00:21:28,440 Speaker 1: with academics in the popular press. So to get this 291 00:21:28,640 --> 00:21:33,920 Speaker 1: debt that has really not gotten much attention, the Haitian 292 00:21:33,960 --> 00:21:39,679 Speaker 1: independence debt of you ask anybody in Haiti, they know 293 00:21:39,760 --> 00:21:43,120 Speaker 1: about it, they think about how many billions they are owed. 294 00:21:43,400 --> 00:21:48,680 Speaker 1: But ask people outside of Haiti, scholars who study this, 295 00:21:49,280 --> 00:21:53,040 Speaker 1: ask people in France, anywhere else in the world, they 296 00:21:53,080 --> 00:21:57,000 Speaker 1: have no idea about this. To bring it into the 297 00:21:57,040 --> 00:22:02,240 Speaker 1: odious debt framework, and and this is as odious of 298 00:22:02,240 --> 00:22:07,240 Speaker 1: a debt that we've ever had in history, I think 299 00:22:07,760 --> 00:22:13,240 Speaker 1: could give power, rhetorical power to the movement to get 300 00:22:13,320 --> 00:22:18,600 Speaker 1: some kind of compensation paid, but also would open the 301 00:22:18,640 --> 00:22:24,520 Speaker 1: door to other similar colonial debts that have not been 302 00:22:24,760 --> 00:22:28,520 Speaker 1: included in the odious debt discussions. So that, I mean, 303 00:22:28,880 --> 00:22:31,800 Speaker 1: this goes back to the question that Tracy started with, 304 00:22:32,720 --> 00:22:36,240 Speaker 1: which is, you know, how is it that the odious 305 00:22:36,320 --> 00:22:41,920 Speaker 1: debt discussions really have been very limited to these despotic 306 00:22:42,080 --> 00:22:46,520 Speaker 1: leaders and whether or not sort of Western creditors will 307 00:22:46,560 --> 00:22:49,520 Speaker 1: get paid back on their bonds when there are all 308 00:22:49,640 --> 00:22:56,400 Speaker 1: sorts of other stinky debts around the world, particularly colonial debts. 309 00:22:56,840 --> 00:23:01,040 Speaker 1: I mean, think of King Leopold of Congo. He borrowed 310 00:23:01,280 --> 00:23:05,280 Speaker 1: heavily on the international debt markets and then you know, 311 00:23:05,440 --> 00:23:10,040 Speaker 1: basically committed genocide in the Congo. There's no discussion of 312 00:23:10,720 --> 00:23:13,960 Speaker 1: you know, those debts. But but this one is is 313 00:23:14,040 --> 00:23:18,720 Speaker 1: a this one is among the really just the stinkiest 314 00:23:18,760 --> 00:23:23,440 Speaker 1: of those to my mind me too. You mentioned, um 315 00:23:23,640 --> 00:23:28,440 Speaker 1: the rhetoric of odious debt being a powerful influence, and 316 00:23:28,920 --> 00:23:32,120 Speaker 1: I think here it's really important that we mentioned that 317 00:23:32,160 --> 00:23:34,640 Speaker 1: even though there's been a lot of talk about Odia's debt, 318 00:23:35,240 --> 00:23:39,399 Speaker 1: it hasn't actually been um, sort of acted upon in 319 00:23:39,440 --> 00:23:43,520 Speaker 1: any real way. So the Iraqi debt that you mentioned earlier, 320 00:23:43,560 --> 00:23:46,399 Speaker 1: and we actually recorded an episode a while back with 321 00:23:46,480 --> 00:23:48,880 Speaker 1: Simon Hendrickson, who did some really great work on this. 322 00:23:49,520 --> 00:23:53,120 Speaker 1: The Iraqi debt situation was basically the closest the world 323 00:23:53,240 --> 00:23:57,120 Speaker 1: ever got to actually acting on the principle of odious 324 00:23:57,160 --> 00:24:02,080 Speaker 1: debt and negating some borrowings under Saddam Hussein, But it 325 00:24:02,119 --> 00:24:07,479 Speaker 1: didn't actually happen. So I guess two questions, Why hasn't 326 00:24:07,480 --> 00:24:10,160 Speaker 1: it happened yet if everyone's talking about it so much? 327 00:24:10,200 --> 00:24:15,120 Speaker 1: And then secondly, what good is talking about odious debt 328 00:24:15,240 --> 00:24:21,520 Speaker 1: if it never actually comes to fruition. So I'll use 329 00:24:21,560 --> 00:24:26,400 Speaker 1: the Iraqi example. You guys had a great episode with Simon, 330 00:24:27,480 --> 00:24:33,320 Speaker 1: and just drawing from Simon's work, discussing the Iraqi debt 331 00:24:33,440 --> 00:24:36,399 Speaker 1: in terms of its odious nous was part of the 332 00:24:36,520 --> 00:24:41,400 Speaker 1: strategy of the legal team there, and they knew they 333 00:24:41,400 --> 00:24:46,440 Speaker 1: didn't have a leg to stand on if they actually 334 00:24:46,520 --> 00:24:49,760 Speaker 1: had to go to court and try to argue that 335 00:24:49,840 --> 00:24:53,520 Speaker 1: this doctrine existed. Now, there are legal scholars who argue 336 00:24:53,600 --> 00:24:58,679 Speaker 1: that as a matter of customary international law, such a 337 00:24:58,720 --> 00:25:02,840 Speaker 1: doctrine has evolved. Alved I am skeptical that you could 338 00:25:03,440 --> 00:25:06,640 Speaker 1: actually persuade a court to do that, but the rhetoric 339 00:25:06,800 --> 00:25:13,040 Speaker 1: of odious debt was powerful enough that the negotiators for 340 00:25:13,280 --> 00:25:18,040 Speaker 1: Iraq were able to get in the Paris Club the 341 00:25:18,160 --> 00:25:22,800 Speaker 1: biggest write down of debt ever in history. I mean 342 00:25:22,800 --> 00:25:26,840 Speaker 1: it was something like a right down of debt. And 343 00:25:27,000 --> 00:25:31,679 Speaker 1: it was because at least in part, that they clothed 344 00:25:31,760 --> 00:25:35,520 Speaker 1: it in the rhetoric of odious debt. I mean, now, 345 00:25:35,960 --> 00:25:41,480 Speaker 1: they did it brilliantly. I mean they got everyone basically 346 00:25:41,560 --> 00:25:46,119 Speaker 1: to agree to take this massive write down because nobody 347 00:25:46,160 --> 00:25:51,240 Speaker 1: wanted exposure of what had actually happened. And if we 348 00:25:51,320 --> 00:25:55,600 Speaker 1: go back in time to the strategy that the lawyers 349 00:25:56,320 --> 00:26:00,800 Speaker 1: for Haiti had planned in two thousand, between two thousand 350 00:26:00,800 --> 00:26:04,800 Speaker 1: two and two thousand four, this was exactly what they 351 00:26:04,840 --> 00:26:07,400 Speaker 1: had in mind. They I don't think they thought they 352 00:26:07,480 --> 00:26:11,680 Speaker 1: really had much of a chance of sort of winning 353 00:26:11,760 --> 00:26:15,200 Speaker 1: a legal case, but they wanted to get into court. 354 00:26:15,359 --> 00:26:19,320 Speaker 1: And once they got into any kind of international jurisdiction 355 00:26:19,880 --> 00:26:24,640 Speaker 1: and they got a hearing, then the atmospherics of how 356 00:26:24,720 --> 00:26:27,320 Speaker 1: bad this was was going to be on their side. 357 00:26:27,440 --> 00:26:31,359 Speaker 1: So that's a long winded answer to why this could 358 00:26:31,400 --> 00:26:37,720 Speaker 1: have really practical consequences. Can I add something crazy? I'm 359 00:26:37,760 --> 00:26:41,520 Speaker 1: you know, I'm by nature optimistic, and I remember one 360 00:26:41,560 --> 00:26:45,840 Speaker 1: episode and so if you remember around the in the nineties, 361 00:26:45,880 --> 00:26:50,320 Speaker 1: there were people campaigning for for multilateral debt relief, and 362 00:26:50,400 --> 00:26:54,080 Speaker 1: basically the position of the you know, US administration and 363 00:26:54,280 --> 00:26:57,000 Speaker 1: that ate at that point was that this is never 364 00:26:57,000 --> 00:26:59,320 Speaker 1: going to happen. And then at some point it just 365 00:26:59,400 --> 00:27:01,560 Speaker 1: happened it and the you know, the White House was 366 00:27:01,600 --> 00:27:03,880 Speaker 1: on board, and the people who were on board were 367 00:27:03,920 --> 00:27:06,840 Speaker 1: exactly the same people who two or three years before 368 00:27:06,840 --> 00:27:08,679 Speaker 1: I said this is never gonna happen. The you know, 369 00:27:08,760 --> 00:27:11,399 Speaker 1: the the World Bank is never going to cancel that 370 00:27:11,960 --> 00:27:15,639 Speaker 1: or by lo income countries. So in a sense, maybe 371 00:27:16,280 --> 00:27:19,159 Speaker 1: you know, preparing the ground, the sort of building a 372 00:27:19,240 --> 00:27:22,480 Speaker 1: case for something that you think is right, maybe at 373 00:27:22,480 --> 00:27:26,199 Speaker 1: some point things can change. So I also see it 374 00:27:26,240 --> 00:27:29,920 Speaker 1: is in this sense. But but but met always thinks 375 00:27:29,920 --> 00:27:49,040 Speaker 1: that I'm I'm a dreamer. Can we go if we 376 00:27:49,320 --> 00:27:52,600 Speaker 1: go back to the details of Haiti. I mean, you 377 00:27:52,680 --> 00:27:58,080 Speaker 1: mentioned the stats are not particularly reliable from that time, 378 00:27:58,160 --> 00:28:02,399 Speaker 1: but maybe the debt was years worth of total total 379 00:28:02,520 --> 00:28:06,119 Speaker 1: revenue for the country at the time. And as you mentioned, 380 00:28:06,400 --> 00:28:08,760 Speaker 1: it's still talked about today and we taught and as 381 00:28:08,800 --> 00:28:12,680 Speaker 1: Tracy and I discussed in the intro, Haiti is obviously 382 00:28:12,760 --> 00:28:16,320 Speaker 1: one of the poorest countries is known and under you know, 383 00:28:16,480 --> 00:28:18,199 Speaker 1: people think of it as one of the poorest countries 384 00:28:18,240 --> 00:28:22,359 Speaker 1: in the region. How much did that debt contribute to 385 00:28:22,600 --> 00:28:27,840 Speaker 1: the economic trajectory, the poor economic trajectory of Haiti some 386 00:28:28,000 --> 00:28:30,600 Speaker 1: nearly two hundred years ago, or about two hundred years ago, 387 00:28:31,040 --> 00:28:36,120 Speaker 1: how much did that contribute to the economic and sort 388 00:28:36,160 --> 00:28:39,200 Speaker 1: of disaster that Haiti is known to be all these 389 00:28:39,240 --> 00:28:42,880 Speaker 1: years later. So so we did a bunch of backup 390 00:28:43,040 --> 00:28:47,400 Speaker 1: of the envelope exercises. Some exercises are trying aimed at 391 00:28:47,400 --> 00:28:50,920 Speaker 1: trying to estimate how much this money would be worth today. 392 00:28:51,040 --> 00:28:55,520 Speaker 1: And another exercise is exactly focused on your question, Joe, 393 00:28:55,680 --> 00:28:59,600 Speaker 1: how much of the audible growth performance of of a 394 00:28:59,680 --> 00:29:02,920 Speaker 1: height year over the past to two years can be 395 00:29:03,080 --> 00:29:07,240 Speaker 1: attributed to this death. I'll tell you about the numbers. 396 00:29:07,240 --> 00:29:10,680 Speaker 1: But before that, there is a document in in in 397 00:29:11,080 --> 00:29:13,600 Speaker 1: a the classified document in the archives of the i 398 00:29:13,800 --> 00:29:16,680 Speaker 1: m F. And this is a report about of a 399 00:29:16,760 --> 00:29:20,280 Speaker 1: mission to a hitty in So the IMF must have 400 00:29:20,320 --> 00:29:22,920 Speaker 1: been one or two year old. And let me use 401 00:29:22,960 --> 00:29:25,760 Speaker 1: this to just give a big thank you whoever manages 402 00:29:25,800 --> 00:29:29,160 Speaker 1: the archives of the IMF, because they did an amazing service. 403 00:29:29,200 --> 00:29:32,840 Speaker 1: They put everything online, all these classified documents, and now 404 00:29:32,840 --> 00:29:35,400 Speaker 1: I can kind of read this stuff from my bedroom 405 00:29:35,440 --> 00:29:41,080 Speaker 1: and it's it's fantastic. So anyway, this I m F 406 00:29:41,200 --> 00:29:45,920 Speaker 1: document starts by saying fiscal policy in Haiti in general 407 00:29:46,040 --> 00:29:51,080 Speaker 1: has not been development promoting because it has priviolely been 408 00:29:51,200 --> 00:29:56,880 Speaker 1: primarily motivated by revenue els and basically to service the debt. 409 00:29:57,320 --> 00:30:00,720 Speaker 1: And this has taken priority on any other type of 410 00:30:00,840 --> 00:30:05,080 Speaker 1: investment that promoted economic development. So without running any let's 411 00:30:05,080 --> 00:30:08,560 Speaker 1: say statistical analysis, there is this, you know, report from 412 00:30:08,600 --> 00:30:13,000 Speaker 1: the fund from seven years ago that basically says there 413 00:30:13,080 --> 00:30:16,480 Speaker 1: is some problem linked to the death. Having said this, 414 00:30:17,040 --> 00:30:23,800 Speaker 1: there are some econometric estimates on how that affects GDP growth, 415 00:30:24,440 --> 00:30:27,680 Speaker 1: And there is a famous paper by three I m 416 00:30:27,720 --> 00:30:31,920 Speaker 1: F economists again Katy Pattillo and the Poisson and and 417 00:30:32,000 --> 00:30:37,720 Speaker 1: Luca Ricci, which suggests ballpark estimates the high level of 418 00:30:37,760 --> 00:30:43,240 Speaker 1: that reduced growth between one uh and two percentage point 419 00:30:43,520 --> 00:30:48,200 Speaker 1: per year. Now, if we apply the lower this estimated 420 00:30:48,240 --> 00:30:52,480 Speaker 1: to this, just we applied the one percent growth reducing effect, 421 00:30:53,400 --> 00:30:57,360 Speaker 1: we find that gdpeper carpet and heating now should be 422 00:30:57,480 --> 00:31:02,800 Speaker 1: about eight THO dollar, which is much higher than than 423 00:31:02,960 --> 00:31:05,840 Speaker 1: than what is today, and in fact, it would put 424 00:31:06,160 --> 00:31:10,520 Speaker 1: it basically at the same level of income per capita 425 00:31:10,600 --> 00:31:13,720 Speaker 1: of of the Dominican Republic. Now it's hard to say that, 426 00:31:13,760 --> 00:31:16,520 Speaker 1: you know, without the death, would be the Dominican Republic, 427 00:31:16,920 --> 00:31:20,320 Speaker 1: But that's what you get from doing this calculation. And 428 00:31:20,360 --> 00:31:24,720 Speaker 1: then if you compute the present value of this differentially 429 00:31:24,760 --> 00:31:28,360 Speaker 1: income per capita, you get, you know, a ridiculously high number. 430 00:31:28,440 --> 00:31:31,080 Speaker 1: You get something like, you know, one trillion dollars, which is, 431 00:31:31,200 --> 00:31:35,160 Speaker 1: you know, which is really a huge number. But even 432 00:31:35,280 --> 00:31:38,320 Speaker 1: if you get that the growth effect of the death, 433 00:31:39,000 --> 00:31:43,720 Speaker 1: it's only one fifth of the lower bound estimate of 434 00:31:43,840 --> 00:31:48,800 Speaker 1: patio and quotas, you still get that the present value 435 00:31:49,720 --> 00:31:53,160 Speaker 1: of the growth effect of this death is about fifty 436 00:31:53,160 --> 00:31:57,080 Speaker 1: one billion of two day's dollar, which is three times 437 00:31:57,120 --> 00:32:02,960 Speaker 1: of HIGHTUS GDP. Which interesting was that debtojpratio when the 438 00:32:03,040 --> 00:32:09,040 Speaker 1: debt was creative? Um? Quite a coincidence? Um? Okay. So 439 00:32:09,040 --> 00:32:12,520 Speaker 1: so here we have this debt burden, which Mittwo has 440 00:32:12,520 --> 00:32:16,480 Speaker 1: described as like the stinkiest of all odious debt. We 441 00:32:16,600 --> 00:32:21,160 Speaker 1: have something that, as Ugo just laid out, basically contributed 442 00:32:21,560 --> 00:32:26,760 Speaker 1: to the long term poverty arc of Haiti. You can 443 00:32:26,840 --> 00:32:31,120 Speaker 1: trace the impact of the debt on Haiti's current debt situation, 444 00:32:31,320 --> 00:32:34,280 Speaker 1: you know, two hundred years later, which is pretty amazing. 445 00:32:35,160 --> 00:32:40,080 Speaker 1: What are the chances that odious debt actually comes into 446 00:32:40,120 --> 00:32:45,520 Speaker 1: play and that we get some sort of legal process 447 00:32:45,520 --> 00:32:48,480 Speaker 1: exploring this option. I guess that's another way of saying, 448 00:32:48,640 --> 00:32:52,440 Speaker 1: what would illegal claim on this issue actually look like? 449 00:32:52,760 --> 00:32:56,880 Speaker 1: And is it more likely that we get a situation 450 00:32:56,920 --> 00:33:00,960 Speaker 1: similar to the Iraqi debt where the odious that is 451 00:33:01,120 --> 00:33:05,880 Speaker 1: used as an argument for some sort of additional financial 452 00:33:05,920 --> 00:33:11,440 Speaker 1: aid rather than total reparations, you know, fifty billion dollars 453 00:33:11,520 --> 00:33:16,560 Speaker 1: or whatever, based on the economic impact of the original bonds. 454 00:33:17,480 --> 00:33:20,400 Speaker 1: This in a sense brings us full circle to the 455 00:33:21,320 --> 00:33:26,000 Speaker 1: question that you have asked Tracy about the existence of 456 00:33:26,040 --> 00:33:31,240 Speaker 1: an odious debt doctrine. If you if we were really 457 00:33:31,360 --> 00:33:35,480 Speaker 1: litigating this, so somehow we could get a jurisdiction like 458 00:33:35,560 --> 00:33:40,040 Speaker 1: the International Court of Justice to hear this, and that 459 00:33:40,040 --> 00:33:42,520 Speaker 1: would be hard because France would have to agree to 460 00:33:42,640 --> 00:33:47,840 Speaker 1: show up. Then I think it's a fairly straightforward legal 461 00:33:47,920 --> 00:33:51,880 Speaker 1: claim under international law. Even if you don't want to 462 00:33:52,000 --> 00:33:55,320 Speaker 1: use the odious debt doctrine here, you would just make 463 00:33:55,360 --> 00:34:00,280 Speaker 1: the argument that this was an unjust illegal debt was 464 00:34:00,360 --> 00:34:04,600 Speaker 1: imposed in eighteen twenty five and the money needs to 465 00:34:04,640 --> 00:34:09,320 Speaker 1: be returned, so we would call it just give us restitution. 466 00:34:09,680 --> 00:34:12,839 Speaker 1: You were not entitled to take our money. Give it 467 00:34:12,880 --> 00:34:16,799 Speaker 1: back to us. And the way you would calculate damages 468 00:34:17,600 --> 00:34:21,560 Speaker 1: for them having unjustly taken your money and not even 469 00:34:21,640 --> 00:34:26,320 Speaker 1: imposing punitive damages would be said would be to ask, 470 00:34:26,719 --> 00:34:31,200 Speaker 1: what are the opportunity costs of your having taken between 471 00:34:31,400 --> 00:34:34,320 Speaker 1: ninety million francs and a hundred and fifty million banks 472 00:34:34,440 --> 00:34:38,240 Speaker 1: depending on how you make the calculation back in eighteen 473 00:34:38,239 --> 00:34:42,600 Speaker 1: twenty five or over this lengthy period. So that's if 474 00:34:42,640 --> 00:34:47,239 Speaker 1: you get in to some kind of tribunal. Now, the 475 00:34:47,320 --> 00:34:54,040 Speaker 1: lawyers in two thousand four, under President Aristide, we're just 476 00:34:54,400 --> 00:35:00,239 Speaker 1: about to file a claim. There was this dream team 477 00:35:00,560 --> 00:35:04,120 Speaker 1: of lawyers from around the world who were working pro 478 00:35:04,200 --> 00:35:08,120 Speaker 1: bono for the Haitians, and they thought they had a 479 00:35:08,120 --> 00:35:12,759 Speaker 1: good chance of getting into a tribunal. And then President 480 00:35:12,800 --> 00:35:18,480 Speaker 1: Aristide is overthrown and the new government decides that, uh, 481 00:35:18,520 --> 00:35:21,400 Speaker 1: you know, it does not want to anger the French 482 00:35:21,520 --> 00:35:25,360 Speaker 1: who are supporting it in bringing such a claim, and 483 00:35:25,440 --> 00:35:30,280 Speaker 1: the whole thing disappears. But this is not as implausible 484 00:35:31,360 --> 00:35:35,200 Speaker 1: of a claim as I would have thought. Legally, the 485 00:35:35,239 --> 00:35:43,279 Speaker 1: Iraqi argument was this is um much more potent. But 486 00:35:43,440 --> 00:35:46,680 Speaker 1: you have to get to some tribunal. And you know, 487 00:35:47,280 --> 00:35:50,880 Speaker 1: Ugo and I have presented our work in front of 488 00:35:51,320 --> 00:35:56,560 Speaker 1: a few audiences, and often we are faced with our 489 00:35:56,640 --> 00:36:01,080 Speaker 1: friends who are French economists who have never heard of this, 490 00:36:01,760 --> 00:36:06,759 Speaker 1: and they are completely outraged that that that France did this. 491 00:36:06,960 --> 00:36:09,600 Speaker 1: I mean that their reaction is uh. I have not 492 00:36:09,760 --> 00:36:13,799 Speaker 1: found their reaction to be defensive. Instead, it's why didn't 493 00:36:13,800 --> 00:36:16,360 Speaker 1: I know about this? And what can we do to 494 00:36:16,480 --> 00:36:20,120 Speaker 1: fix it? I do think that this is a matter 495 00:36:20,360 --> 00:36:26,040 Speaker 1: of public discussion and that will result in something positive, 496 00:36:26,120 --> 00:36:31,920 Speaker 1: particularly given the horrible state that hades in now. Tragy, 497 00:36:32,000 --> 00:36:34,040 Speaker 1: I think that's a good place to leave it for me, 498 00:36:34,120 --> 00:36:36,960 Speaker 1: unless you have anything further that works for me. Yeah, 499 00:36:37,040 --> 00:36:39,560 Speaker 1: I think you you both laid it out the issue 500 00:36:39,719 --> 00:36:42,600 Speaker 1: UM wonderfully. So thank you so much for coming on 501 00:36:42,640 --> 00:36:46,399 Speaker 1: all thoughts and walking us through how two hundred year 502 00:36:46,440 --> 00:36:50,759 Speaker 1: old debt could still be relevant to today. Thanks for 503 00:36:50,800 --> 00:36:53,600 Speaker 1: having us, Thank you so much. Thank you that would 504 00:36:53,600 --> 00:37:07,759 Speaker 1: frantaic that really I really appreciate it. So, Joe, this is, 505 00:37:08,200 --> 00:37:11,040 Speaker 1: as you can probably tell, a topic that I find 506 00:37:11,400 --> 00:37:15,920 Speaker 1: endlessly fascinating, partly because I think it says something wider 507 00:37:16,160 --> 00:37:20,120 Speaker 1: about financial debt. And I don't think we think about 508 00:37:20,160 --> 00:37:27,560 Speaker 1: this often enough. But debt is almost exclusively about morality 509 00:37:27,600 --> 00:37:31,120 Speaker 1: and fairness in the sense that in order for debt 510 00:37:31,200 --> 00:37:33,920 Speaker 1: to exist, you know, someone has to borrow and another 511 00:37:33,960 --> 00:37:38,800 Speaker 1: person has to lend, and someone ends up owing someone something. 512 00:37:39,280 --> 00:37:44,080 Speaker 1: So yeah, and so there are so many judgments and 513 00:37:44,400 --> 00:37:49,440 Speaker 1: norms that go into how that story is told of 514 00:37:49,520 --> 00:37:53,800 Speaker 1: who owes what to whom and why. And I don't 515 00:37:53,800 --> 00:37:57,800 Speaker 1: think we step back and sort of consider those norms 516 00:37:58,000 --> 00:38:01,520 Speaker 1: enough and the judgments that are shaped thing how debt 517 00:38:01,520 --> 00:38:04,359 Speaker 1: actually functions and how we think about it. Yeah, you know. 518 00:38:04,440 --> 00:38:06,879 Speaker 1: The other thing I completely agree. You know. The other 519 00:38:06,920 --> 00:38:10,880 Speaker 1: thing that's interesting is, you know, finance in general is 520 00:38:10,920 --> 00:38:13,520 Speaker 1: like a kind of uh. I sometimes think of finance 521 00:38:13,560 --> 00:38:17,799 Speaker 1: as a time machine because you're essentially uh, you know, 522 00:38:17,920 --> 00:38:20,680 Speaker 1: you you can you can have cash right now that 523 00:38:20,760 --> 00:38:22,960 Speaker 1: would otherwise say, like if you borrow money, you can 524 00:38:23,000 --> 00:38:26,800 Speaker 1: have cash right now, that would otherwise take several years 525 00:38:26,800 --> 00:38:29,719 Speaker 1: worth of work. So you know, you're sort of transferring. 526 00:38:29,800 --> 00:38:34,840 Speaker 1: It's transferring of value, transferring of money across time, and 527 00:38:35,440 --> 00:38:39,400 Speaker 1: you go and me to discusses like essentially an extremely 528 00:38:39,440 --> 00:38:42,359 Speaker 1: long version of that, and so you know, it's one thing. 529 00:38:42,400 --> 00:38:44,880 Speaker 1: It's like we could all wrap in our heads very concretely, 530 00:38:44,920 --> 00:38:47,120 Speaker 1: how I say, debt that was taken out ten years 531 00:38:47,160 --> 00:38:50,960 Speaker 1: ago may affect us today. But there's no particular reason 532 00:38:51,080 --> 00:38:54,160 Speaker 1: to think that a debt that's two years old that 533 00:38:54,200 --> 00:38:57,239 Speaker 1: people have forgotten about, the people around the world don't 534 00:38:57,239 --> 00:39:00,719 Speaker 1: even know about or had never thought about before might 535 00:39:00,760 --> 00:39:05,960 Speaker 1: still be relevant today. It's kind of an extreme outlier, 536 00:39:06,400 --> 00:39:09,759 Speaker 1: but fundamentally, as you say, it's all part of the 537 00:39:09,800 --> 00:39:12,520 Speaker 1: same question. But I guess that's what makes this particular 538 00:39:12,560 --> 00:39:17,759 Speaker 1: case extremely interesting and me to point it out sort 539 00:39:17,800 --> 00:39:22,400 Speaker 1: of like worth folding into the odious debt literature totally. 540 00:39:22,560 --> 00:39:25,480 Speaker 1: And the other thing that I was thinking, and we've 541 00:39:25,480 --> 00:39:28,239 Speaker 1: been talking a lot about this on all thoughts for 542 00:39:28,360 --> 00:39:31,280 Speaker 1: the past year now, but whether or not the extraordinary 543 00:39:31,320 --> 00:39:39,279 Speaker 1: circumstances of one spark a wider reckoning on some of 544 00:39:39,320 --> 00:39:42,320 Speaker 1: these complicated issues. And I think, you know, we've spoken 545 00:39:42,360 --> 00:39:46,480 Speaker 1: about attitudes towards debt shifting in the context of modern 546 00:39:46,520 --> 00:39:51,120 Speaker 1: monetary theory and MMT. And I do wonder if given 547 00:39:51,160 --> 00:39:55,400 Speaker 1: the terrible humanitarian situation unfolding in Haiti, you know, you 548 00:39:55,480 --> 00:39:58,960 Speaker 1: have COVID, you have the president getting assassinated, now you 549 00:39:59,080 --> 00:40:04,279 Speaker 1: have another catastrophic earthquake. I do wonder if if you 550 00:40:04,320 --> 00:40:09,160 Speaker 1: could see a big shift in the narrative around something 551 00:40:09,200 --> 00:40:14,120 Speaker 1: like colonial era debt. Well that's interesting because me too 552 00:40:14,200 --> 00:40:19,520 Speaker 1: made this point that even prior so you know, it's like, okay, 553 00:40:19,600 --> 00:40:24,759 Speaker 1: why is this an important thing to classify as odious debt? 554 00:40:24,840 --> 00:40:27,560 Speaker 1: And as he pointed out, yes, there is the legal dimension, 555 00:40:27,600 --> 00:40:30,560 Speaker 1: but there's also the activist dimension. There's the NGO dimension, 556 00:40:30,880 --> 00:40:34,120 Speaker 1: there's the kill the Debt movement, and so much like 557 00:40:34,360 --> 00:40:37,600 Speaker 1: m m T, which is sort of this hybrid between 558 00:40:37,680 --> 00:40:39,680 Speaker 1: I would you know, I describe it as like a 559 00:40:39,760 --> 00:40:44,239 Speaker 1: hybrid between sort of like pure economics and political activism. 560 00:40:44,280 --> 00:40:48,239 Speaker 1: It kind of feels like situations like this end up 561 00:40:48,280 --> 00:40:53,160 Speaker 1: being this hybrid between what's in the law, what's in 562 00:40:53,200 --> 00:40:57,680 Speaker 1: the sort of legal text, and also the general public 563 00:40:57,760 --> 00:41:00,600 Speaker 1: and the activism around these things. And so I think 564 00:41:00,719 --> 00:41:03,880 Speaker 1: you make a really apt point here that you know, 565 00:41:03,920 --> 00:41:06,279 Speaker 1: we could be in a moment where there's just sort 566 00:41:06,280 --> 00:41:08,680 Speaker 1: of like more public awareness and then that has this 567 00:41:08,760 --> 00:41:10,759 Speaker 1: sort of like feed through effect to what happens in 568 00:41:10,840 --> 00:41:13,719 Speaker 1: various courts of law and marketplace totally. And I would 569 00:41:13,760 --> 00:41:16,719 Speaker 1: say that gets back to the sort of um morality 570 00:41:17,120 --> 00:41:20,480 Speaker 1: of bonds more widely, and this idea that you know, 571 00:41:20,600 --> 00:41:24,920 Speaker 1: ultimately a debt is about fairness um and achieving fairness 572 00:41:24,920 --> 00:41:27,680 Speaker 1: in the outcome. And so in many ways it's sort 573 00:41:27,680 --> 00:41:32,440 Speaker 1: of the perfect instrument through which to discuss the injustice 574 00:41:32,800 --> 00:41:37,440 Speaker 1: of um the past. Like it fits very nicely into 575 00:41:37,600 --> 00:41:41,520 Speaker 1: arguments because you can suddenly say, well, you owe us 576 00:41:41,880 --> 00:41:46,000 Speaker 1: x amount for damages inflicted you know, two hundred years ago, 577 00:41:46,040 --> 00:41:47,960 Speaker 1: and we can put some sort of quantity on them, 578 00:41:48,000 --> 00:41:50,400 Speaker 1: and we can talk about what the economic impact is. 579 00:41:50,960 --> 00:41:53,560 Speaker 1: All right, Well, Joe, I could keep talking about this forever, 580 00:41:53,680 --> 00:41:56,600 Speaker 1: but we should probably go um, should we leave it there? 581 00:41:57,000 --> 00:42:00,440 Speaker 1: Let's leave it there? Okay. This has been another episode 582 00:42:00,480 --> 00:42:03,040 Speaker 1: of the All Thoughts podcast. I'm Tracy Alloway. You can 583 00:42:03,080 --> 00:42:06,120 Speaker 1: follow me on Twitter at Tracy Alloway and I'm Joe 584 00:42:06,160 --> 00:42:08,680 Speaker 1: wi Isn't Thal. You can follow me on Twitter at 585 00:42:08,719 --> 00:42:12,680 Speaker 1: the Stalwart. Follow our guests on Twitter. Ugo Panitza, He's 586 00:42:12,800 --> 00:42:17,160 Speaker 1: at Panizza. Follow our producer on Twitter. Laura Carlson. She's 587 00:42:17,200 --> 00:42:20,320 Speaker 1: at Laura M. Carlson. Follow the Bloomberg head of podcast, 588 00:42:20,360 --> 00:42:23,799 Speaker 1: Francesca Levi at Francesca Today, and check out all of 589 00:42:23,800 --> 00:42:27,800 Speaker 1: our podcast at Bloomberg under the handle at podcasts. Thanks 590 00:42:27,840 --> 00:42:28,320 Speaker 1: for listening.